Quarterly profit soars 33% for UPS

SamMamudi

NEW YORK (MarketWatch) -- United Parcel Service Inc. said Tuesday first-quarter profit jumped 33%, as the shipping company's results eclipsed estimates.

UPS
UPS, -0.93%
reported a net profit of $533 million, or 53 cents a share, up from $401 million, or 40 cents, earned in the first three months of 2009. Quarterly revenue rose 7.2% to $11.73 billion.

On an adjusted basis, first-quarter profit would have been 71 cents a share compared to 52 cents a share in the year-ago period, according to the Atlanta-based company.

Analysts surveyed by FactSet Research had expected, on average, profit of 69 cents a share on revenue of $11.65 billion.

Shares of UPS traded up a fraction in Tuesday's pre-market.

Management said the upturn came from growth in its international package and supply-chain businesses, yield improvement and increased operating leverage.

"In the first quarter we realized the benefits from the hard work we have been doing to streamline our operations. First-quarter results exceeded our expectations and set a strong foundation for the rest of 2010," said Kurt Kuehn, chief financial officer.

Kuehn also said UPS expects the first-quarter trends to continue, and affirmed the company's recently raised adjusted 2010 earnings projection of a range of $3.05 a share to $3.30 a share.

UPS said that consolidated volume during the first quarter was 940 million packages, a 3% increase. Average revenue per piece also rose 3% as a result of rate increases and higher fuel surcharges.

The latest quarter saw UPS generate $1.3 billion in free cash flow, and as of March 31 the company had $3.1 billion in cash and marketable securities. UPS also bought back more than 4 million shares, at a cost of $260 million.

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